Inheritance Tax Warning: More Families ‘Will Have to Pay’ After Rishi Sunak Relocates | Personal Finances | Finance
British residents paid a record amount of inheritance tax in July after the number of coronavirus deaths skyrocketed. According to new figures released by the Office for National Statistics (ONS), receipts from the 40 percent death right reached £ 571million last month, marking the highest amount ever paid in a single month. The increase means the Treasury has taken £ 2.1bn since the start of the new fiscal year in April, £ 500m more than the same period last year.
Experts said the record inflow was also due to a freeze on tax breaks and more areas becoming eligible for the right due to rising house prices.
Earlier this month, an expert warned more families would be hit by the tax after Chancellor Rishi Sunak froze the threshold at £ 325,000 in March.
Richard Bull of Crowe, a tax firm, told The Telegraph: “More and more families will be forced to pay the IHT in the future as asset growth continues while tax breaks are largely down. frozen.
It comes after HMRC figures released in July showed receipts received by the government in fiscal year 2020 to 2021 totaled £ 5.4 billion.
This is a four percent increase, £ 190million, from the 2019 to 2020 tax year.
The HMRC detailed this reversed a decline seen last year and means that revenue has remained at broadly similar levels since tax year 2017.
While the government earns more from the tax, 33,000 people have been affected, or nearly a third, according to forecasts by the Office for Budget Responsibility.
The government will raise an additional £ 1 billion by 2026 by keeping the legacy threshold of £ 325,000 at its current level. The tax bracket has not increased since 2009, despite an increase in house prices of around 60% in the following years.
However, the Telegraph this month reported on a number of ways savers can try to lower their inheritance tax bill.
READ MORE: State pensions outrage amid fears Sunak could remove triple lockdown
“It allows them to borrow money from the trust when needed rather than withdrawing capital or income. They could even pay interest to the trust, further reducing their estate and future taxes.
“It also ensures that any future growth in the trust’s assets does not fall within the tax domain.”
Gary Coogan of NFU Mutual, another advisor, pointed out that savers can ask for refunds if the properties used to appraise their assets lose value.
He added: “Discounts are not granted automatically and must be claimed proactively.
“Those who opt for do-it-yourself probate are not always aware that inheritance tax can be reclaimed this way, so families should take advice to make sure they are not missing anything.”